Are Gift Vouchers a waste of money? Reply

Christmas Gifts

As much as £300 million worth of gift vouchers bought in 2014 were unspent according to research by the UK Gift Card and Voucher Association (UKGCVA).

Every year 6% of vouchers bought by consumers go unused as they lay forgotten in people’s wallets and drawers.

In 2013 some £2.5 billion worth of gift cards and vouchers were sold in UK retail stores as gifts and £2.25 billion were purchased by businesses as staff or customer rewards. Meanwhile a UKGCVA report shows that in the third quarter of 2014, the gift card and voucher industry grew by 10%. The UK industry as a whole is now worth £5 billion.

Modern technology may provide the answer as digital vouchers, such as those that can be loaded on to a mobile phone, are becoming more popular according to the UKGCVA, and may be more likely to be used because the recipient does not have to remember to take a physical piece of plastic or paper with them to the shops.

Unfortunately, vouchers are a taxable benefit in kind

Vouchers that can be exchanged for cash

These vouchers count as earnings, regardless of who gives the voucher to your employee, so you’ll need to:

  • add their value to the employee’s other earnings
  • deduct and pay PAYE tax and NICs through your payroll
  • report any NICs for the pay period when the last payment is made in the same period

Vouchers exchangeable for goods and services only (non-cash vouchers)

Add the cost of the vouchers to the employee’s earnings – unless they’re luncheon or childcare vouchers. For these, use the voucher’s face value.

Non-cash vouchers that are exempt from NICs

These include vouchers for:

  • travel between home and work on a work bus
  • social functions, such as a Christmas party, up to £150 per head
  • childcare vouchers up to a certain amount

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/426508/CWG2__2015_.pdf

Generally, there is no VAT on purchased gift vouchers as they are treated as cash equivalents, its only when they are used to purchase items that VAT needs to be accounted for.

But some vouchers can be subject to VAT as explained in this UKGVCA fact sheet

steve@bicknells.net

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Are you missing out on money you’re entitled to? 2

Pot of gold coins isolated on white

You could be missing out on money that is owed to you:

UK Benefits https://www.gov.uk/benefits-adviser

The benefits adviser checks if you’re eligible to claim:

  • Attendance Allowance
  • Bereavement Allowance
  • Bereavement Payment
  • Carer’s Allowance *
  • Carer’s Credit
  • Child Benefit *
  • Child Tax Credit *
  • Constant Attendance Allowance
  • Disability Living Allowance
  • Employment and Support Allowance *
  • Guardian’s Allowance
  • Housing Benefit *
  • Incapacity Benefit
  • Income Support *
  • Industrial Injuries Disablement Benefit
  • Jobseeker’s Allowance *
  • Maternity Allowance
  • Pension Credit *
  • State Pension
  • Statutory Adoption Pay
  • Statutory Maternity Pay
  • Statutory Paternity Pay
  • Statutory Sick Pay
  • War Widow’s or Widower’s Pension
  • Widowed Parents Allowance
  • Working Tax Credit *

(*) – For these benefits, you’ll also get an estimate of how much you might get.

Lost Pensions https://www.gov.uk/find-lost-pension

The Pension Service will help you track down any lost pensions, if you’re not retired you might be able to consolidate all your pensions to get a better return.

Unclaimed Assets and Forgotten Funds http://www.unclaimedassets.co.uk/

Assets are considered dormant when contact with the owner is lost – typically due to a name change after marriage or divorce, an unreported change of address or expired postal forwarding order, and incomplete or illegible records.

It’s important to note millions of family members remain unaware they’re entitled to collect unclaimed assets owed deceased relatives, who passed on without leaving updated financial records for their heirs.

The majority of this lost money comes from dormant bank accounts, orphan pensions, unknown windfalls, missing shares and abandoned dividends, forgotten life insurance policies, National Savings Certificates and Premium Bonds which have not been redeemed; but also included is £300 million in unclaimed National Lottery winnings!

Lost Savings and Bank Accounts http://www.mylostaccount.org.uk/

If you think you may have lost touch with your account or savings, this website will guide you through some simple steps to help reunite you with your money. This is a FREE service and is brought to you by the British Bankers’ Association, the Building Societies Association and National Savings and Investments.

steve@bicknells.net